This was the country’s political machine in overdrive after last-ditch mediated talks to avert a default broke down in New York. Argentina has been battling a group of hedge funds — so-called holdouts — who sued the country for a full payment of $1.5 billion on bonds that Argentina defaulted on in 2001.

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Argentina Official on Failed Debt Talks

After debt talks collapsed, the economy minister of Argentina, Axel Kicillof, characterized the negotiations with an American hedge fund as extortion.

The multiyear dispute reached a breaking point on Wednesday after Argentina missed a deadline on a scheduled interest payment to its regular bondholders. Argentina’s predicament has arisen from a ruling by a federal judge in the United States that it could not make its regular payments on bonds without also paying the hedge fund holdouts. Wednesday evening, a court-appointed mediator issued a statement declaring Argentina to be “imminently” in default.

But Argentines woke up on Thursday to headlines in some of the country’s most popular newspapers indicating that some sort of private deal was in the works and that a default would be averted. Local reports described how Argentine and foreign banks had put forth varying proposals to buy the debt from the hedge funds.

Such confusion did not come as a surprise to many ordinary citizens. For a nation that went through a devastating default 13 years ago, the collective memory of what a real economic default feels like is still fresh.

“It’s not comparable to 2001,” said Gustavo, a 32-year old who is a wholesale trader with a small family business. He did not want to give his surname because he described how he has traded pesos under the table for United States dollars.

Many Argentines who saw the value of the peso spiral quickly and their savings vanish after the last default have not been caught off guard this time.

“These past years have taught us a strategy of how to save up money in a reliable way,” Gustavo said.

For most Argentines, the currency of choice is the dollar, but they have to go through the black market to obtain it. “It is difficult or almost impossible to keep those savings safe in Argentina, because money loses value very quickly here,” he added.

Reaction to Argentina’s default in financial markets was also muted on Thursday, in part because no one seems to know what would happen next. In Argentina, stocks and bonds responded more forcefully; the price on Argentina’s benchmark foreign bonds slipped after rallying over the last two days.

Argentina’s main Merval stock index fell by more than 8 percent from a record high on Wednesday. On Friday, the International Swaps and Derivatives Association will announce whether Argentina’s missed payment could trigger credit-default swaps on Argentine foreign securities.

While the mood in Argentina remains largely calm for now, this could change, warned Barbara Kotschwar, a research fellow at the Peterson Institute for International Economics and an adjunct at Georgetown Center for Latin American Studies.

“I think that many people buy the argument that Argentina did not default, and buy into the hatred of the evil vultures,” she said, referring to the government’s attempt to vilify the hedge fund holdouts.

“The story to watch, however, is what conclusion Argentines will draw in the medium term if their country’s economy and their personal welfare is affected and their daily lives become more complicated.”

A version of this article appears in print on 08/01/2014, on page B6 of the NewYork edition with the headline: Argentina Is in Default, and Also Maybe in Denial.